All Forum Posts by: Amanda Breck

It might depend on the type of trust and how it was set up. Something like an irrevocable trust with an independent trustee could be considered a 3rd party. If it is an estate plan set up as a Living Trust with you as the trustee, that would not be a 3rd party. If you don't know what kind of trust you have, working with an attorney to figure that out is essential. 

You might try showing them the operating agreement and formation documents for the Wyoming Holding LLC. The operating agreement should show your ownership. One of the nice things about WY LLCs that can be tricky in some situations is that Wyoming does not publish the members or managers of LLCs on the SOS website. This allows you to have some anonymity for your structure, but can make working with lenders difficult at times. Legally your structure is just fine, but lenders all have different preferences and internal rules they work with.

If this lender won't work with your structure, your options are to change the structure like they suggest, which I don't usually recommend, or to find another lender who will work with the structure. If it comes down to potentially losing a great deal, you may need to prioritize the deal over the WY LLC benefits.

Congrats on your first rental property!

For investors just starting out, I always recommend that you consider the risk you are taking on and how to manage and mitigate it with an asset protection plan. Real estate investing is an inherently risky area to navigate in terms of liability, and you want to make sure that risk is mitigated wherever possible. If you want to grow and keep what you build in your portfolio, these considerations are essential.

With a small portfolio when you can handle less risk of loss, separating each property owned into an LLC to limit your personal liability and isolate one property from another is a good way to go. That way if a lawsuit due to some kind of accident on a property happens, any judgement is limited just to that LLC and that property rather than putting your personal assets and other properties at risk. As your portfolio and your risk tolerance grow, grouping properties in LLCs becomes more reasonable.

Best of luck to you!

If you are using LLCs, it is a good idea to have a separate bank account for each LLC you are using. This helps to avoid co-mingling of funds, which can be cause to pierce the corporate veil and undo your limited liability in a lawsuit situation.

As others have said here, it is important to keep your books and records clear when handling the rental income and expenses. If you can do that in one bank account, that's great! If it helps you to keep track with separate accounts or separate sub-accounts, that's also great. 

California is a very tenant friendly state and is it very likely that you are required to help with relocation assistance. As another posted mentioned, a cash for keys arrangement even when relocation assistance is not required by law is very common and often a good way to avoid needing to file an eviction. California's court websites usually have very helpful and comprehensive self-help guides for landlords that can assist you in navigating this. I often recommend having a good CA landlord's attorney contact to help with landlord/tenant issues.

Welcome! 

For investors just starting out, I always recommend that you consider the risk you are taking on and how to manage and mitigate it with an asset protection plan. Real estate investing is an inherently risky area to navigate in terms of liability, and you want to make sure that risk is mitigated wherever possible.

With a small portfolio when you can handle less risk of loss, separating each property owned into an LLC to limit your personal liability and isolate one property from another is a good way to go. That way if a lawsuit due to some kind of accident on a property happens, any judgement is limited just to that LLC and that property rather than putting your personal assets and other properties at risk. As your portfolio and your risk tolerance grow, grouping properties in LLCs becomes more reasonable.

There are lots of great videos on YouTube you can check out that talk about asset protection for real estate investing.

Welcome to Bigger Pockets and good luck with your investing!

As others have said, you can reasonably charge her the whole amount of rent here. She did not give proper notice, and even if she did, because there was a year lease and presumably no clause to terminate early, she would still be responsible for the remainder of the term. Landlord's have a duty to mitigate damages, which in plain language means you need to get a tenant in as soon as reasonably possible (you don't have to cut corners on screening or anything like that). This is typically more applicable where a tenant breaks a lease with more than a partial month left on the term. For example, if it was a year lease and a tenant said they needed to move out after six months, they would usually still be responsible for the rest of the rent for the year but you as the landlord would be responsible for getting a new tenant in the property. Once the new tenant is in, the old tenant no longer has to pay rent. 

Yes, so long as the WY LLC remains a SMLLC, you should be fine to make the HI LLC an s-corp. Because you live in CA, you will need to register the HI LLC in CA in order to pay yourself a salary. Employing and paying an individual is considered doing business in a state.

 If you search "consent for audio recording in Iowa" that should give you some good results! The Reporters Committee for Freedom of the Press is a good website for recording laws, they should have a page on Iowa. 

Hi Katie, 

Your tenant does not necessarily have rights to the Ring doorbell account. It is allowable for a landlord to install cameras for security purposes where the tenant does not have a reasonable expectation of privacy. The front door and an unfenced backyard are not private areas, so the camera aspect is just fine there. It is good practice to let the tenants know that there are cameras there, but this does not require giving them access. 

The trickier part here is the potential audio recording. The rules for audio recording depend on the state and you make not be able to collect audio as well as video without prior authorization from the tenants, which is easier to imply if they have access to the Ring doorbell account. If you are withholding access to the account, it would be important to either have explicit permission for audio recording in writing, or to turn off audio recording completely. These rules are state specific however, so it may be worth looking into what your local rules say.